The future of real estate is here, quicker than anyone imagined

The global pandemic has sped up changes in real estate that were born of societal change, to the point where we will now see a very different built environment emerge around us. This is the conclusion of a report by law firm Withers Worldwide, which spoke to executives across the architecture, property and hospitality spaces.

The home might have become an office to many recently, but changes won’t stop there. We will start to see the emergence of ‘the third space’, a place to work that is neither work nor the office. The result could be revitalised high streets and opportunities to create much more flexible properties.

The research looked at three real estate areas: home, work and socialising. All three will become more intertwined in the future, concluded the experts, requiring a much higher level of flexibility from those who create and manage properties.

“The choice will become home, work and a third space,” said respondent Katrina Kostic Samen, Founder of KKS Savills and architect.

Starting with the office of the future, Nectar Efkarpidis, Co-founder of Molonglo Group, said: “We believe the office will change to accommodate more precise functions that come about from people needing to be together. The old ways are cookie cutter, the new ways will be more customized.”

Several respondents highlighted the increasing role of hospitality in workplaces. If people can work from home, the office might become a place to socialise with colleagues more than a place to sit at a desk. And while workplaces might become hospitality-driven, cafes and restaurants could start to offer the amenities people need to be able to work there – they can become the “third space”.

Turning to homes, the experts spoken to by the survey highlighted how living spaces will be reimagined. People will move out of the city centre as they no longer need to be there for work and suburbs will be given a new lease of life.

“For the last 30 years, cities have sucked everything in,” said Yolande Barnes, Chair of The Bartlett Real Estate Institute at University College London. “Now they are breathing out and seeding particles wherever they land.”

Pleasingly, the overall view was that community and sustainability were going to become far more important not just to the people who live in developments, but to the people who create them. Investors and developers are realising the benefits.

“Placemaking is going to become much more important alongside those environmental things, and housebuilders will want to develop and build a reputation based on both their eco credentials and also their placemaking credentials,” said Lucian Cook, Head of Residential Research at Savills.

Overall it’s an interesting report, with a lot of blue sky thinking. There’s no doubt that the global pandemic has brought about changes at a much faster pace than anyone could have imagined. At Mayer Construction, we are able to be as agile as possible to adapt to trends and ensure we are working with partners to deliver the properties that work in tomorrow’s world. 

The tech creating taking commercial property hands-free

In a world facing a global pandemic, hands-free is undoubtedly the way forward. Now businesses are edging back into their offices and people are getting familiar with a new way to negotiate shops, cafes and other leisure activities, there is still a necessity to improve how we do things.

In the last six months alone, the technology available to make the built environment as hands-free as possible has come on leaps and bounds. The simplest of actions, from pushing a door open to signing a lease on a building, can now be done digitally and even remotely.

At Mayer Construction, we’re looking into how we can implement several different products, from facial recognition technology to software to manage deliveries sheets. The following are a few technologies and techniques we’ve come across that help to make any type of commercial property safer, from construction right through to management.

Modular construction

Modular construction is not tomorrow’s world; many companies across the UK are expanding factories to expand their production. Assuming modular construction is possible at a site – there are always limitations, such as access – there can be many benefits. Reduced waste, reduced labour costs, fewer hold-ups due to bad weather, for example.

From the point of view of reducing pandemic risk, having fewer hands involved in construction is an obvious benefit. Taking modular construction a step further into the future, 3D printing could reduce risks posed by supply chains. A necessary product could be printed instantly, without having to cross countries and companies.

Choosing your building from afar

It is now far easier to find and either lease or buy a property without being anywhere near it. Although properties have been listed online for years, now many websites and agents use 3D walk throughs or videos to reduce the number of people who want to view a property in person.

Software now exists that allows a potential buyer to inspect a property from a distance. The virtual due diligence tool from Hollis, for example, goes into details as nitty gritty as blocked guttering. Start-up Aprao carries out feasibility analyses for property developers from afar.

Signing on the dotted line

Gone are the days when you had to walk into an office and sign on the dotted line to lease a property. Today, once you have selected a home or commercial property to lease, everything can be done via an app. The RENTCafe CRM Flex platform from Yardi, for example, facilitates leases and can take payments. 

Start-ups in the proptech sphere are launching every day with the aim of easing the buying and leasing process. For example, Coadjute claims to slim the buying process down to days by joining all elements of the property sector, as does Yourkeys.

Building management

The number of building elements that can now be measured remotely is astounding; temperature, humidity, number of people in a space, the list goes on. There is a growing choice of software platforms available that bring these measures into one place. Savvy, for example, collects and presents real time data to allow a landlord and tenant to understand how space and energy is being used.  

The future will take us even deeper into technology; many businesses and property owners are starting to consider face recognition technology to open doors, for example, or to use a wifi network that detects when someone’s phone is nearby and boils a kettle. The way we interact with the buildings around us could be changing forever and we at Mayer Construction are determined to evolve with it.

Could the construction industry’s growing skills shortage be reversed by Covid?

The UK’s construction sector has been facing a growing skills shortage for some time. According to the Royal Institute of Chartered Surveyors, the shortfall in the number of skilled UK construction workers is at its highest point since 2007.

Various reasons for this are cited, including an aging population and a general desire among young people to continue studying. A lack of apprenticeships is also mentioned and some of the larger housebuilders such as Berkeley and Barratt have even launched their own training academies to create their own young recruits.

However, although Covid-19 has forced considerable change on how we all operate, changes that we have probably not fully comprehended yet, there could be a silver lining. Could more young people see the attraction in a career in construction that, in the right setting, offers opportunities and consistency?

The UK government is intent on creating 300,000 new homes a year but is a long way off hitting this. According to the NHBC, only just over 161,000 homes were registered in 2019, a 1% increase on 2018. So residential construction is unlikely to cease. Add to this the government’s interest in pursuing new construction methods such as modular construction, and there could be real opportunities for young people looking to forge a career.

Of course, construction will always have an element of inconsistency as projects start and complete. However, demand for housing is going nowhere. The UK needs skilled workers if it is to come anywhere close to hitting new homes targets, while improving existing buildings to meet environmental targets.

At Mayer Construction, we only work with the best. We work with highly skilled people, expert in their craft, sourcing whoever is best suited for each individual project. Our team is always keen to hear from people who are interested in working with us, who have a particular skill or who would like to develop themselves by working with us. Get in touch if that sounds like you.  

The launch of the IMMUNE standard for property

In desperate times people move fast. The world could be on the cusp of the fastest vaccine delivery in history for Covid-19 if current tests prove successful. The process of developing global standards is usually a particularly slow process, but the pandemic has similarly spurred the property industry to find a way to assess a building’s ability to withstand health risks.

In July, Liviu Tudor, head of the Brussels-based European Property Federation and founder of Genesis Property, launched the IMMUNE building standard. This open-source global certification has been designed to create a pandemic-proof built environment as people return to the workplace. Tudor kickstarted the project in April 2020 and the team has been inspired by hospital ‘clean rooms’.

The IMMUNE standard lists more than 100 measures that can be implemented in an existing building – crucially, the standard doesn’t just focus on building new, low-risk properties. The measures address facilities management and technical solutions to certify all aspects of a building’s lifecycle with the aim to address current and future health challenges. Currently, the standard focuses on office buildings, but Tudor’s team says that it can be adapted to other building types including hospitality, retail, healthcare, educational and research.

For example, the workplace of the future could include a quarantine room, a specially designed and equipped room where people can go if they feel ill. An emergency IMMUNE ‘warehouse’ manned by an IMMUNE ‘steward’ could be stocked with suitable PPE to distribute if necessary. Digital screens around a building could display immunity-boosting indicators such as indoor air quality versus outdoor air quality. More minor changes to a property could include antimicrobial paint, bathrooms equipped with bio sanitisers and rounded corners to minimise bacterial deposits in toilet cubicles.

All these measures point towards creating a much greater awareness of the impact of our built environment. Already many businesses were taking steps to understand how property impacts staff health and how to create an atmosphere of ‘wellness’, but Covid-19 has shone an even stronger light on this area. If we are to return to the workplace, safely and comfortably, employers need to demonstrate they are doing all they can to mitigate risk.

Adoption of the IMMUNE standard, if it proves popular in the property industry, will undoubtedly take time. Already, however, the set of measures provide food for thought for all property owners if nothing else. At Mayer Construction, we’re talking closely with all our partners to understand how we can create commercial and residential developments that provide the environment today’s clients need and expect.  

Wiser, stronger, innovative: construction post Covid-19

Some people might argue that the construction industry has been crying out for evolution for some time. New technologies, increased environmental pressures and society’s evolving expectations for service delivery are just some of the driving forces behind this pressure to change.

The Covid-19 crisis has accelerated the need for evolution. The pandemic has been a worrying time for many people, but now we are emerging from lockdown, for now at least, many industry players are looking to how we can create new working environments and embrace the positive changes the pandemic has necessitated.

The leaders of the McKinsey Engineering, Construction and Building Materials Practice Group have produced an excellent report on how construction can emerge stronger after coronavirus, which highlights industry-wide changes that we are likely to see. Here’s our take on how we believe priorities will change across the UK construction industry.

Staff welfare

All construction companies place huge importance on staff welfare. This will only become more important. Protecting staff from virus risks by creating a clean and safe site is going to remain a top priority. Happily, this is likely to boost staff morale, rather than hamper it.

Managing social distancing is going to continue to ask for innovative solutions, however. Maintaining distances is extremely difficult on site and Mayer Construction isn’t alone in constantly assessing each project individually to come up with a plan that works for every scenario.

Let’s get digital

On the subject of innovation, quite a few property and construction technologies have been creeping towards construction sites in recent years and now their adoption will increase. Face recognition technology will be used to allow people on site and monitor workers’ locations. Project management software will be used to streamline the number of people allowed on site. Virtual site walkthroughs will allow clients to take a tour of progress without having to visit.

All these technologies are geared towards making construction sites more efficient and to streamline the traffic of people at any one time. Chances are we might have to enter lockdown again; technology will help developers to ensure work can carry on.

Supply chains

This is, obviously, a global pandemic and has affected supply chains considerably. Businesses that were preparing for whatever Brexit scenario we are faced with will now also be preparing for disrupted suppliers and transportation.

A construction company is likely to work on new agreements with suppliers in the event of disruption, as well as stock piling critical equipment and materials. Storage will become more important, as will access to various types of transport. A developer might choose to widen its net to work with more suppliers, in the hope that one might be able to deliver if another is facing difficulty.

Pleasantly, we may well see suppliers and construction companies develop new relationships, to establish agreements that create an improved working relationship. This crisis has affected everyone; we’re in it together.

Environmental focus

When Covid-19 hit and society faced an extreme threat, we were forced to react and alter working practices overnight. Although we’ve known for years that climate change presents equally real threats to our way of life, change has been painfully slow. However, it seems that the world has finally woken up.

Increasingly we will operate in a culture where environmental factors top the list of decision-making criteria – due to both legislation and societal pressure. Carbon reduction targets are only going to get more stringent. The pandemic has shown that we can work in new ways, so we now need to make sure environmental awareness is included in that new way of thinking.  

Working towards BREEAM ‘Excellent’: Q&A with Carbon Consult

Sustainability has climbed the agenda of commercial property investors and developers, not just due to legislation but thanks to market pressure. Today’s occupants expect a high level of environmental performance from the buildings they inhabit, and rightly so.

Thankfully, there is a growing number of product and service providers that can help a contractor to raise the bar. Standards and external certifications such as BREEAM have become a vital tool to help a developer communicate the sustainable credentials of a project and final property.

Mayer Construction is working with consultancy Carbon Consult to ensure that its construction of an office at 159-163 Kings Cross Road is rated BREEAM ‘Excellent’. We spoke to Carbon Consult Director Fleur Baguley about the project.

Firstly, what is BREEAM?

Fleur: BREEAM is a holistic assessment scheme that looks at a range of sustainability features in a building. It aims to mitigate real estate’s impact on the environment and provide a way to communicate its environmental benefits, which will stimulate the construction of more sustainable buildings. The framework is constantly updated as legislation and practices evolve.

Once a building is assessed it is given a rating, from ‘Unclassified’ through ‘Pass’ ‘Good’ ‘Very Good’ through to ‘Excellent’ and ‘Outstanding’. Examples of building elements that are assessed include management of the project, energy, water use, materials, waste and pollution.

How is Carbon Consult working with Mayer Construction?

Fleur: We are working with Mayer Construction on a series of measures to design and build a property to the best sustainability standards. Our overall goal is to achieve a BREEAM ‘Excellent’ rating.

Specific project features include a passive design analysis and implementation that will reduce CO2 emissions by 20%, use of low carbon technology such as a photovoltaic array, a target to divert 80% of waste away from landfill and a reduction in water use by 42% through efficiency.

When did you start working on the project?

Fleur: We generally start working on projects at any stage, from initial conception and building design to execution. BREEAM works best where it can be embedded into the building design to allow the best possible performance outcomes. We are working closely with Mayer Construction to further the design in terms of BREEAM and embed the requirements within the construction phase.

How will the building’s occupier benefit from inhabiting a BREEAM ‘Excellent’ building?

Fleur: For a start, energy performance will be excellent so bills will be lower than in a less sustainable building. The building will have been designed from the beginning to be as efficient as possible.

Secondly, a BREEAM ‘Excellent’ building should create an environment that is pleasant to work within. ‘Sick building syndrome’ has been an issue documented and discussed in previous years and one which occupiers are increasingly conscious of. Design aspects of schemes such as BREEAM and WELL are increasingly used to ensure new assets can actively contribute to people’s health and wellbeing by incorporating natural light, fresh air and so on. Not only will staff be happier, but studies show that they will be more productive.

Have you witnessed an increased focus on sustainable construction?

Fleur: Yes, the construction industry and occupiers are all more aware of the importance of sustainability than, say, a decade ago. The 2016 Paris Agreement made it a legal obligation for investors to seek “responsible” investment opportunities hence sustainability has been high on the agenda.

BREEAM was actually established in 1990 and has had various iterations since then. It’s been really picking up speed in the last few years and has become a mandatory planning requirement for many councils.

Is there a similar sustainability standard in the residential sector?

Fleur: At the moment, there is no legal obligation regarding sustainability in the residential sector. However, this will change.

The UK is leading in the development of the Future Homes Standard, which will require new build homes to meet high energy performance standards. By 2025, gas boilers will be banned from new buildings so that will push new energy sources such as air and ground source heat pumps. The market is moving quickly, and it is exciting to see how quickly new measures will be adopted.

How will property fare in 2020?

2020 will be a year of continued change for London. Although a Conservative majority government has instilled a certain level of certainty in people’s minds, there are still Brexit negotiations to continue, fluctuating global politics and an increasing wariness of climate change.

All these factors will impact the residential and commercial property markets this year. Here are a few thoughts on what we could expect.

Residential property is on the up

Following the Conservative win, and in the hope of some semblance of Brexit certainty, UK residential property prices are already on the rise. The market expectation is that this will continue in 2020; Savills is predicting a rise of 1% while Strutt and Parker’s prediction is more optimistic at 4%.

The rise was heralded as soon as the New Year fireworks had fizzled out; Chinese property magnate Cheung Cheng-kiu agreed to pay more than £200m for a mansion on Rutland Gate in Knightsbridge. This is the highest price paid for a property in the UK to date and can be viewed as a bell weather not only for the property market, but for overseas confidence in London as a whole. However, the increased taxes for overseas buyers that the Conservative manifesto has thrown into the ring could mean overseas enthusiasm is short lived.

People will become more footloose

It has been a trend for some time now for people to take slightly less notice of postcode when making property decisions. This is true in both the residential and commercial property spheres.

In the residential market, buyers have always sought out value alongside other factors such as connectivity and amenities. Although property prices have fallen in recent years and months, it is still harder to find value than it once was. We expect people to look into new and evolving areas for the ideal place to make their home.

In the commercial market, the traditional norms of where occupiers settle will continue to evaporate. Why should a law firm stick to Mayfair? Or a tech firm to Shoreditch? Businesses are increasingly making decisions based on the property, its credentials and its immediate surroundings rather than its address and we expect more firms to move into slightly more surprising areas as the year progresses.

Sustainability will continue to rise up the agenda

Sustainability, zero emissions, zero waste; all aspects of preserving the environment have been zooming up everyone’s agendas. In 2020, the pressure on the property industry and those it serves will increase.

Businesses will be increasingly pressured to assess the risk that climate change poses to their operations and the properties they occupy. At the same time, we are being encouraged to make our homes as climate neutral as possible, employing both technology and streamlined ways of living that reduce waste and consumption. The voices of those looking to reduce climate change will get louder, not quieter, during 2020.

Post election, the prime resi market is all go, but will it last?

Following the Conservative’s decisive victory in December’s General Election, London’s prime residential market has leapt into action. The moment the result was announced deals were signed, illustrating the catastrophic impact the recent political situation has been having on the market. Buyers’ recent reticence to sign on the dotted line wasn’t simply down to Brexit; it was a lack of confidence in the UK’s political environment.

Almost immediately, the media started reporting prime residential sales across London. According to the Evening Standard, for example, a Hong Kong businessman bought a £65m penthouse in Belgravia just hours after the election result. But now the market has come to life, what next?

We could expect action to continue for the coming months. Overseas buyers may look to pre-empt any surcharge to stamp duty planned by Boris Johnson’s government. UK purchasers may also want to act before market confidence could push prices higher in the new year. Many industry pundits are predicting a wave of action across the board.

But it’s worth considering how the installation of a solid Conservative government won’t evaporate all the challenges the prime residential market is facing. Once initial excitement has worn off, the market will still be contending a range of hurdles.

Firstly, although it’s now slightly clearer what Brexit could look like and when it will happen, uncertainty will still be present in the coming 12 months about the UK’s future relationships with the rest of the world. Large corporates are still threatening to move their offices overseas, though many have determined to stay.

Secondly, changes to stamp duty continue to hover in the air, though it’s likely the government will make announcements early in the new year. Will this help or hinder the UK’s residential market?

Finally, moves such as Westminster Council’s decision last year to limit the size of new build homes to 150 sq m highlight local authorities’ uncertainty about how to deal with the country’s housing crisis. Will limiting the size of new homes really make a difference to the wider availability of homes for everyone? Or will it simply restrict the vibrant industry of architects, engineers and developers that has grown around the development of such high-quality homes?

Certainly 2020 looks brighter for prime residential property than 2019 has been, but we must be cautious about getting too excited. Whatever announcement the government’s makes, however, there’s no doubt that in buyers’ eyes London will continue to offer some of the highest quality properties in the world.